NORTHAMPTON, MA / ACCESSWIRE / August 1, 2024 / American Airlines
Originally published in American Airlines' 2023 Sustainability Report
Sustainability at American includes protecting the safety of our team members and customers, attracting and developing the talent we need, providing our customers with a world-class travel experience and positioning American to compete in a low-carbon economy.
Our efforts across all these areas are integral to running a reliable operation and a resilient, profitable enterprise that will thrive over the long term.
We have long recognized the importance of environmental, social and governance issues and have developed an integrated and transparent approach to related oversight, management, measurement, assurance and reporting. We believe we are making progress, but we continue to look to best practices within and outside our industry as we refine and strengthen our approach.
Our Priority Sustainability Issues
We periodically conduct sustainability-focused materiality assessment processes that serve as the foundation of our analysis of areas of sustainability risk and opportunity. We conducted our most recent process in early 2023, which affirmed our priority issues. As part of the process, we also identified responsible sourcing as a topic of growing importance, so we have added content on our sourcing policies and practices to this year's sustainability report.
Through ongoing engagement across our company and with a broad range of external stakeholders, we annually validate and, as needed, refine our assessment based on the input we receive and on changes in our operating environment. We also continually monitor trends, standards, regulatory developments and practices relevant to our industry to inform our areas of focus.
These activities have affirmed our focus on the following priority sustainability issues:
Safety • Human capital
Customer satisfaction and operational performance
Climate change and fuel efficiency
Driving progress across all these issues is a key objective for American. We also recognize that the business landscape is evolving rapidly and that we must be ready to address new areas of concern if or when they emerge.
Member of Dow Jones Sustainability Indices Powered by the S&P Global CSA
In 2023, American Airlines was named to the Dow Jones Sustainability World Index (DJSI World) for the first time, and we are one of only two passenger airlines included. DJSI World comprises global sustainability leaders as identified by S&P Global through the Corporate Sustainability Assessment. It represents the top 10% of the largest 2,500 companies in the S&P Global Broad Market Index based on long-term economic, environmental and social criteria. American was also included in the Dow Jones Sustainability North America Index for the third year in a row.
Management and Governance of Sustainability Topics
American takes a coordinated approach to governance of sustainability issues, including climate-related risks and opportunities. It begins with Board-level oversight and extends to our day-to-day operations.
Key Roles and Responsibilities
Board Level | Sustainability-Related Focus Area |
Full Board | American's Board of Directors is the company's ultimate oversight body. It receives regular reports from each of the standing committees, and it also regularly reviews significant issues, such as operational performance, customer satisfaction and union relations. It also receives periodic briefings from management on our cyber-risk management program. The Board is currently made up of 10 independent directors, including a nonexecutive chairman, and our Chief Executive Officer. |
Audit Committee | The Audit Committee has oversight of our approach to business conduct and ethics. In this role, it acts on behalf of the Board to oversee the integrity of the company's financial statements, the independent auditor's qualifications and independence, and the performance of both American's internal audit function and our independent auditor. This committee also oversees risk management policies that relate to cybersecurity |
Compensation Committee | The Compensation Committee has oversight responsibility for our human capital issues, including compensation, benefits and diversity. |
Corporate | The CGPR Committee has primary oversight of American's sustainability efforts, including our climate strategy. Its purpose also includes oversight of political activities and the procedures for compliance with significant applicable legal, ethical and regulatory requirements that impact corporate governance and public responsibility. |
Finance Committee | The Finance Committee has oversight responsibility for the company's capital expenditures and commitments, including investments in new aircraft. |
Safety Committee | The Safety Committee has oversight responsibility for American's policies, programs and practices with respect to operational safety and compliance as well as matters affecting the safety of our customers and employees, including security and public health. Its purpose also includes oversight of the procedures for compliance with significant applicable legal, ethical and regulatory requirements related to safety. |
American's CEO has ultimate responsibility and authority for the company's operations, results and financial performance. The CEO leads our Senior Leadership Team (SLT), which manages the strategic direction of our business, including the priority sustainability issues described in this report. SLT members are in turn responsible for managing and implementing the company's programs in their respective areas.
Key Roles and Responsibilities
Management Level | Sustainability-Related Focus Area |
Safety | American's Chief Operating Officer (COO), who reports to the CEO and serves on the SLT, is responsible for safety across American, including airport operations, flight operations, technical operations, inflight and cargo operations. The COO is supported by a Vice President, Safety, who leads a team that works in concert with leaders across American to strengthen the company's safety management practices and performance. |
Human Capital | American's Chief People Officer, who reports to the CEO and serves on the SLT, leads all aspects our people strategy, including talent and recruitment, compensation and benefits, learning and development, and diversity, equity and inclusion. |
Customers | Responsibility for different aspects of customer service and the customer experience is distributed across key leadership roles. Operational performance and airport customer service is under our COO, while most customer experience initiatives and offerings are managed within our commercial organization. |
Environmental Sustainability | American's Executive Vice President (EVP) and Chief Government Affairs Officer, who reports to the CEO and serves on the SLT, is responsible for the company's environmental sustainability strategy, policies and progress, as well as the company's broader sustainability reporting and disclosure, including related to climate change. The EVP is supported by a Vice President, Sustainability, who leads a team that works in concert with leaders across American to strengthen the company's sustainability performance. |
Climate-related governance
At the management level, the Board has formally assigned our CEO the responsibility for management of our climate change strategy. Our Vice President, Sustainability, coordinates and leads the development of American's climate strategy, with input and guidance from the Climate Change Steering Committee, a cross-functional and crossoperational group of senior leaders charged with assessing the effectiveness of our sustainability strategy, its implementation and further integration of sustainability into American's strategy and operations. In early 2024, at the request of the Climate Change Steering Committee, the Sustainability team established a cross-functional working group focused on preparing to implement emerging climate-related regulatory disclosure requirements applicable to American.
Responsibility for specific climate-related issues is embedded in senior roles across our company. For example, the Operations team conducts resiliency planning for more frequent and severe weather events, our Fuel Procurement team works to secure costeffective supplies of sustainable aviation fuel (SAF), and our Flight Operations and Fleet Engineering teams are focused on improving fuel efficiency in the air and on the ground.
Climate-related risk management
Through our existing enterprise-wide risk management process, American monitors and manages a broad range of strategic, financial and operational risks, including risks associated with climate change. To inform our understanding of the climate risk landscape, we conducted an initial forward-looking climate scenario analysis in 2020 that focused on identifying and assessing the physical and transition climate-related risks and opportunities facing the company over the short, medium and long term. In 2022 and early 2023, we continued to build on this by undertaking a more detailed analysis of these risks and opportunities. This included adding 1.5°C climate scenarios into our assessment, as well as expanding the number of sites included in the physical risk evaluation, exploring geographic regions around the world in which we operate that are projected to experience greater impacts, and examining more closely the effects of potential changes in policy, technologies and markets.
The insights from this process, conducted in alignment with the recommendations of TCFD, continue to inform our climate strategy and are enabling us to more deeply integrate climate risk analysis into our ongoing risk management and business, strategy and financial planning processes. For details, see page 61.
Public Policy and Political Contributions
Political, legislative and regulatory decisions can have a significant impact on American's success, and we have adopted policies that guide our participation in these processes. Reflecting best practices, our Statement on Public Policy Engagement and Political Participation describes how management and the Board of Directors oversee American's public policy engagement and the policy considerations that influence such engagement.
We do not use corporate funds to contribute to candidates, political party committees or political action committees. On the rare occasion when we use corporate funds to contribute to a state or local ballot initiative or a 501(c)(4) organization, we have committed to disclosing that contribution. In 2023, we made a $1,500 contribution to Coalition for a Better 2050 in support of a ballot initiative in North Carolina.
The CGPR Committee oversees the company's major advocacy priorities and activities, political contributions and principal trade association memberships. We are committed to aligning our lobbying efforts with the priorities and goals of the Paris Agreement, the international treaty on climate change.
For more information on American's policies and procedures related to corporate governance and risk, as well as our Standards of Business Conduct, please see our website.
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SOURCE: American Airlines
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